Is it wise to pay-off my mortgage? 28 March 2016 at 7:49PM in Mortgage-free wannabe 9 replies 1.1K views

MooseTig

I bought my little terraced house in the north of England in 2006 and I'm now in the very fortunate position to pay off the last of my mortgage (just over £2k). As much as I've been looking forward to this moment it has recently struck me that maybe paying it completely off isn't such a good idea as I don't have any form of credit anywhere else (bar my Halifax Clarity card which I only use on my annual foreign holiday that gets paid off in full on my return). To make sure I keep some form of credit score going should I leave say £1 on my mortgage and stop my monthly repayments? I've scoured the net on this but I can't seem to find it being discussed anywhere!

Any advice gratefully received (I'm a good budget-er but I don't really understand credit etc).

Mr.Generous

pay it off, what do you need credit for anyway? Paid mine off 11 years ago, no problem using cards. I impetuously got a car loan after no mortgage and no problem with that. its a great feeling paying it off.

A_Frayed_Knot

You would have to get this confirmed, but depending on your age, and future plans, I read somewhere that it may be a good idea to have £1 left on your mortgage. Any plans for renovation, extensions or anything else the theory is its easier to get another loan/up your mortgage. Hopefully someone will be able to confirm or advise better.

MooseTig

Thanks guys, but a 50/50 split in terms of opinion! Mr.Generous, I really can't wait to be mortgage free but to be honest, only having a pound left on there would feel like that anyway. A Frayed Not, those were my concerns so I'm glad someone else agrees. Hopefully I'll be able to make some sort of informed decision soon!
Thanks again.

Luckyinlife

I cant see there being and issue if you ever need credit agine. say you wanted to move or upgrade the bank would the the fact your 100% house owner and willing to take more credit out aginest it

if youv managed so far without credit youll be fine :]

A_Frayed_Knot

MooseTig wrote: »

Thanks guys, but a 50/50 split in terms of opinion! Mr.Generous, I really can't wait to be mortgage free but to be honest, only having a pound left on there would feel like that anyway. A Frayed Not, those were my concerns so I'm glad someone else agrees. Hopefully I'll be able to make some sort of informed decision soon!
Thanks again.

A lot has to do with your age, earnings and plans. Only then can a decision be made, I always find out all the facts 1st, then double check, then decide.

My mortgage advisor said, when I was remortgaging, that he had never met anyone that asked so many questions :rotfl:but did comment that I knew what I was doing

MooseTig

Luckyinlife, I'm self-employed in a rather precarious profession so when I originally took my mortgage out in 2006 (pre-crash) it was a nightmare. Nowadays it'll be even worse. I've never remortgaged as I dropped onto a very low tracker rate when the economy went belly up (one of the few people to gain from it) hence why I've been able to overpay so much. Long term plan is to save money in ISA's now and then aim for a bigger house when I've got a lot more capital to put in. I genuinely think getting credit (despite my good rating) will be very hard.

A_Frayed_Knot

Just going by what you have stated. I would not completely clear my mortgage.

Please let us know what you decide, would be useful info for future.

Luckyinlife

well moosetig seems you are very similar to me

im self employed and had defaults on my credit rating and it was my first house i still got credit with only 1 year of trading accounts to

I think anyone with a nice deposit/equity can get a mortgage/remortgage easy enough because mortgage company's think well look this guy has 20/30/40% to put down if he dont pay well take it away so the risk is very low

I thought to myself if i dont get a mortgage im buying an audi r8 haha lucky enough i got one thro a mortgage adviser at the time and remortgaged 6 months later to my main bank

So if you have good cash deposit and equity i wouldn't worry about getting another one personally

But then agine you could always keep a small balance wouldn't hurt really

juststuff123

Hi

You don't have to decide straight away. If you leave a trivial sum on the mortgage like the £1 you mentioned, it doesn't have to stay like that forever. See how you feel, if you don't get that psychological hit you need; pay it off. If you feel happy to have a £1 balance keep it until you decide your next step.